This archive report was first published on 13 May 2020.
As Kenya continues to grapple with the effects of the Covid-19 pandemic, the manufacturing sector has emerged as one of the hardest hit areas. According to a report by KPMG, between 50 and 80 percent of jobs in the sector could be lost.
However, the government has been working to support local firms, including those in the manufacturing sector. Since 2013, 300 manufacturing firms have set up shop in Kenya, with the sector's contribution to GDP increasing two-fold, from 9 percent to 20 percent, thanks to the inclusion of manufacturing in President Uhuru Kenyatta's Big 4 agenda.
One of the key factors driving the growth of the manufacturing sector in Kenya is the government's efforts to improve the ease of doing business. The country's ranking in the World Bank's 'Ease of Doing Business Index' has significantly risen from 129th place, making it an attractive destination for foreign investors.
Additionally, the government has introduced a 30 percent corporate tax power rebate, which allows manufacturers to claim up to 30 percent of their electricity costs as a tax rebate. This measure is aimed at reducing the high cost of electricity, which has been a major challenge for manufacturers in Kenya.
As the country recovers from the negative effects of Covid-19, it is essential that citizens play their part in supporting the manufacturing sector. By purchasing locally manufactured products, citizens can help create jobs, keep money circulating at home, and even contribute to reducing the use of fossil fuels.
